The crisis has already forced the Scottish government to reverse a decision to wind up its opencast coal task force last week, and prompted a bitter political row. The task force, involving governments, councils and trade unions, will now reconvene next year to try and stem the loss of jobs and ensure that ravaged land is restored.
Hargreaves Services, a Durham-based coal company, has warned that falling coal prices will lead to a big drop in profits next year. This triggered a 14 per cent drop in its share price and reports that it would have to make cutbacks at the seven opencast mines it operates in East Ayrshire, Fife, South Lanarkshire and Dumfries and Galloway.
The company employs 500 people in Scotland, over 300 of them in East Ayrshire. It has also taken over the responsibility for looking after seven other defunct opencast mines, after the collapse of two major coal firms in 2013.
"I am angry that despite repeated warnings we are facing another crisis in the opencast coal sector in Scotland,” said Willie Rennie, the Mid-Scotland and Fife MSP who leads the Scottish Liberal Democrats.
“With the collapse of the coal price we are facing a halt in production in Scotland that could leave us with a legacy of polluted water, barren land, a blighted landscape and a health and safety headache.”
Rennie accused the Scottish government of failing local communities. “Instead of recklessly promoting the exploitation of new opencast mines they should have focused on a plan to restore the failed sites that are already blighting our countryside,” he said.
"Creating sustainable jobs is a top priority for me as it should be for the Scottish government. But boom and bust employment that wrecks the environment and costs millions of pounds to clear up is not in anyone's interest.”
His intervention provoked a furious response from the Scottish government energy minister, Fergus Ewing MSP. The minister’s spokesman accused Rennie of “appalling scaremongering” and “the most crass and destructive form of petty politics”.
He said: “It does a grave mis-service to the communities affected by the coal mining to seek headlines and play politics with the issue. The achievements of the taskforce have been considerable, and we work together – and continue to do that work – to preserve jobs and make progress on restoration.”
Ewing’s spokesman added: “Had Mr Rennie’s advice been followed then instead of these benefits, 500 families having a wage earner, and the chance to restore the mines over the next several years, there would now be no jobs left, and no possibility of restoration.”
Rennie, however, was undeterred. “I am sure local people living in the shadow of opencast mines would prefer if the minister addressed the consequences of the decline of the industry rather than indulging in a personal attack on me,” he told the Sunday Herald.
“Local communities have been let down already and I am determined that it should not happen again. I will be raising the state of the industry in the Scottish Parliament in the New Year.”
Rennie was backed by the Royal Society for the Protection of Birds (RSPB), which highlighted the “massive environmental damage” caused by the failure to fund restoration after the 2013 coal industry collapse. “A tough new regulatory regime must be introduced as soon as possible and before these mistakes are repeated,” said RSPB Scotland’s head of planning and development, Aedán Smith.
Hargreaves confirmed that profit expectations had dropped because of a fall in coal prices. But it pointed out that it had a large, diversified and well-run business that was expected to make more that £30 million profit.
“We are targeting to be debt free by the end of this financial year,” said a company spokesman. “This strong platform gives us the ability to invest and take a longer term view of coal production in Scotland."
He added: “We will be doing all we can to maintain maximum capacity. All of our current projects are protected from recent falls in coal prices through contracts and hedges.”
Trade unions were unable to respond to requests to comment last week.
Opencast coal in Scotland
The seven opencast coal mines being worked by Hargreaves
Glenmuckloch, Dumfries and Galloway
Duncanziemere, East Ayrshire
House of Water, East Ayrshire
Netherton, East Ayrshire
Muir Dean, Fife
St Ninians, Fife
Broken Cross, South Lanarkshire
The seven defunct opencast coal mines being looked after by Hargreaves
Dalfad, East Ayrshire
Powharnal, East Ayrshire
Spireslack/Ponesk, East Ayrshire
Shiel Farm, East Ayrshire
Glentaggart, South Lanarkshire
Mainshill, South Lanarkshire